Faux Collaboration

February 20th, 2018

Most conceptual conversations around collaboration, internal or external, are a huge waste of time, yet daily I see  clients, prospects and business partners spending endless hours doing just that. Here is the key questions to ask yourself: Is there real business with real money at stake? Is it mutually-attractive in our immediate future? Is there the requisite commitment on both sides to convert it into cash quickly? If you don’t have a definitive “Yes” to all three questions, stop right now.

I have created over 75 collaborations in support of my firms’ business growth, and hundreds for large and small clients in 15 sectors and in 91 countries in my near 30 year career. Yet only handful really endure for any significant length of time or develop beyond a very specific need.

© James Berkeley 2018. All Rights Reserved.

Idiotic Management Award: Equiniti

February 20th, 2018

This month’s Idiotic Management Award goes to Mark Taylor, Chief Customer Officer and his firm, Equiniti. A designated share dealing and management company for many of Europe’s leading multinationals, where the simple act of trying to sell share certificates online is a horrible customer experience. Disruptors bang on the doors of Investor Relations in companies like Royal Dutch Shell, GSK, InterContinental Hotels, Sky plc, they need you!

To enter your date of birth, requires 10 seconds clicking on a clock counter, cumbersome and duplicate data entry, regular error messages when you have entered the correct details directing you to call one of their customer representatives, where you are met with “your held in a queue, we are busy” and a 10 plus minute wait if you are lucky. You are then hit with a £45 minimum charge and asked to mail in certificates on the understanding the trade will happen the next day and settlement received two to three working days later. This is 2018, not 1988.

Customers expect both speed (responsiveness) and quality (experience). Are you “shopping” the simplest of customer experiences and making it near seamless? When I call your main telephone number, am I able to quickly communicate with the most relevant individual with minimal effort? When I scour your website do I find a very clear point of contact, who I can contact immediately and if they are not available my message is answered within 90 minutes or am I asked to jump through hoops? Does it reflect a professional and contemporary service image or like Equiniti something out of the “telex” age?

© James Berkeley 2018. All Rights Reserved.

Kung Hey Fat Choi Mrs May!

February 16th, 2018

 

Perhaps no international leader would be more grateful for some traditional “Lucky Money” at this Chinese New Year than Britain’s Prime Minister, Theresa May. Her recent visit to China generated positive headlines (£9 billion of deals, 2500 UK jobs) but the litmus test is to what extent are UK and Chinese private sector companies, particularly those under £500 million of enterprise value able to make significant strides in each other’s market. These companies are the engine of employment growth.

Ralph Jennings, a senior reporter at Forbes interviewed me on the eve of Mrs May’s recent visit

https://www.forbes.com/sites/ralphjennings/2018/01/31/chinas-economic-expansion-hits-a-roadblock-at-the-far-end-of-europe

I remain highly skeptical about “symbolic success”, recalling a visit to the much heralded MG Rover plant in 2012, at the behest of a senior executive at the new Chinese owners, SAIC. A couple of months earlier, political leaders from the UK and China stood on the very same steps in Longbridge heralding this partnership as a  symbol of new era in bi-lateral trade. Walk inside, and talk to British and Chinese workers as I did, and there were telltale signs of mistrust, viper tongues, and unflattering comparisons with the Japanese car makers welcome in the North East of Britain. One Chinese manager, Annie Qi, on an earlier planned visit, called me 5 minutes before the scheduled meeting time to cancel the entire meeting because she had to drop her kids off at school! “Sorry, go back to London” was the curt one-line response. Car assembly ceased, design continues but the heritage of the MG Rover brand has not been exploited some 10 years later by SAIC. Sustaining these relationships is highly complex and ambiguous, it is a very long game for those with deep pockets and deep pools of patience.

© James Berkeley 2018. All Rights Reserved.

London: ICE Totally Gaming 2018 Re-cap

February 15th, 2018

ICE Totally Gaming likes to style itself asthe only B2B gaming event that truly brings together the international online and offline gaming sectors”, here is some future thinking about the sector fresh from last week’s annual event.

  • The biggest event headline was a pointed article in The Guardian questioning the industry’s evolution in a #MeToo world (overt sexualisation of products). For a sector, whose branding has heavily relied on testosterone-fueled excitement, it is an awkward question with few, if any, obvious answers. When for example, over 50% of Las Vegas revenues arise from non-gaming tourism and events, “what happens in Vegas may no longer stay in Vegas” might need to be the new logo, at least in the corporate events market.
  • Caesar’s Entertainment, arguably the must public US corporate casualty in the 2007/8 financial crisis, is back on the front foot. After 10 difficult years, the Mark Frissora-led business has a spring in its’ step. The ex Hertz and GE executive is exuding confidence, exploring multiple partnerships and projects. Often in ways the Caesar’s brand has never successfully been positioned in adjacent markets internationally.
  • Italy remains a gaming paradox. Wrapped in regulation and taxation issues like many US markets, operators and investors can see ripe apples hanging on the trees but their attempts to grab them are constantly frustrated.
  • US sports betting and the US Supreme Court judgement. Everyone is gearing up to get in on the act, not least the US tribes, who with smaller, more entrepreneurial business models may be ideally-placed to bring the most innovative ideas.
  • UK sports betting is approaching a huge fork in the road, ahead of the Government’s ruling on fixed odds betting terminals or “pokies” to my Australian friends.  Stick with limits of four machines per betting shop and a £100 stake per play, a ferocious political and media wind (Daily Mail front page hardship stories. Restrict stakes to £2 per play (prevalence of social welfare issues), see sports betting “majors” (Ladbrokes Coral, William Hill) and others dependent on their largesse (UK horse racing, UK government tax take) face a seismic change to their business models (30% reduction in gross gaming revenues, closures of 30-40% of their betting shops, 1000 of redundancies). Should we care? That depends on your view as to who is responsible for an individual’s actions. My personal opinion is that I am firmly against any form of gambling where there is not a fair and equitable chance of the punter winning long-term. If you applied my principle, we’d be closing down swathes of automated gaming machines, online card/roulette games and pools betting in casinos, bookies and so forth, where the “house” has a huge advantage (size of take out). We’d have more revenues directed to “equitable gaming and betting”.
  • 2018 is arguably the most profound and volatile year for gaming and betting’s adaption to changing societal mores, regulation and tax.  Yet for the smartest investors and regulators, this might well be the greatest year of opportunity (upturn in incumbents business models and branding, new markets, new value propositions, new ways to attract and retain customers, new ways to adapt to regulation and tax risks).

© James Berkeley 2018. All Rights Reserved.

Delusional Co-Investors

February 15th, 2018

 

 

“Who are you today?” I meet a great many $30mio-net worth plus co-investors in growth businesses, who arrive as free spirits but quickly find themselves as “prisoners” in their own mind. Convincing themselves that they are a smart investor in ultimately a profitable growth business, management team and market when recent performance and future indicators suggest the exact opposite. To a certain extent, you can understand entrepreneurs travelling through what I term a “delusional growth zone” (burning ambition and unmatched results) but you’d hope private investors and those advising them would avoid enduring extensive self-imprisonment.  In my experience, “letting go” is a lot harder and painful for wealthy investors than most people ever imagine or discuss. Here is the rub: you cannot improve your situation unless you are willing to be intellectually-honest with yourself first (rational assessment), to not “fear” the consequences of moving on (ego) and to embrace rebounding from failure (accomplishment). This really isn’t about them, it is about you.

© James Berkeley 2018. All Rights Reserved.

Idiotic Management Award: UK Passport Office

February 6th, 2018

Here in the UK when renewing a new passport, the UK’s Passport Office insist on the application form being filled out and countersigned  in “black biro”, no blue black, and woe betide you if your handwriting should stray outside the tiny boxes provided. Rejection! At a cost of £287 for a family of four,  the experience of applying for a passport exudes extreme bureaucracy and frustration. Nearly three years into the fixed term tenure of Mark Thomson, formerly a Managing Director of the international arm of the UK’s Royal Mail, he has seemingly spent more time driving the burden onto the customer to infinitesimal detail and expense while the experience hasn’t improved one iota.

To what extent is the emphasis and energy on improvements in your own organisation over the next 12 months on “internal benefits” (reducing overhead) versus “external benefits” (customer)? Is that a productive and common sense use of scarce time and resources? If like Mark Thomson, you think your actions make sense, you rightly need to be removed from the job.

© James Berkeley 2018. All Rights Reserved.

Snow Joke

February 5th, 2018

Climbing out of a snow drift back onto a piste for a first-time skier is hard if you have never done it before, “raising money” from investors is equally hard for a first-time entrepreneur or private equity manager if you have never done it before. I have helped tens of people with both challenges. Yet I run into smart people weekly, who have been a success in the past but refuse to act today like a success when it comes to investing in their own development.

The common factors for success are do you possess the requisite combination of skills, behaviours and expertise to accomplish your goal (climbing a mountain or raising a fund)? If not, can you find someone, who has successfully accomplished what you are seeking to do, and possesses the skills and volition in the real world to help translate and transfer their success to you (qualified expert)? If you can, hire them. If you cannot or even refuse, you are seeing the problem. The pathway is either excessively risky or ambiguous for even experienced individuals or your own behaviour is contributing to your difficulties. Which is it?

© James Berkeley 2018. All Rights Reserved.

A Season Of Goodwill

December 22nd, 2017

 

To all of you reading this a merry Christmas and a flying start to 2018.

A single act of kindness is the most lasting memory. What are you going to commit to do to spread the goodwill amongst family, friends and the communities you live and work in? How will you reward yourself?

© James Berkeley 2017. All Rights Reserved.

 

Poverty Advice

December 20th, 2017

There is a word for entrepreneurs and small advisory businesses that insist on only rewarding their employees with hard dollars for successful business they can touch, “sharks”. There is a word for employees, who voluntarily accept those terms, “plankton”. You might enjoy, as I do, recreational gambling (horses) for intellectual interest and fun but why would you commit to that bargain when seeking to feed your family? Unless of course, you enjoy living with a constant fear of falling over the cliff edge, are desperate or are merely seeking to find lifestyle work (substantial means). As an entrepreneur, why would you think that is a fast track to building a powerful, sustainable and profitable business? Clueless.

© James Berkeley 2017. All Rights Reserved.

Capital Reality

December 15th, 2017

I just finished reading a quite brilliant book, Lifestorming by Alan Weiss and Marshall Goldsmith. Marshall reminds the reader of one of his most powerful learning points from arguably one of the smartest minds over the past century, American businessman, Peter Drucker. I smiled when I reflected upon how frequently I am asked to correct this behaviour in my own work, particularly amongst entrepreneurs and private equity investors building businesses.

An excessive amount of time is wasted

  • Trying to prove how right we are (brilliant idea, investment decision-taking) and how good we are (vanity) with ourselves and our key constituents when the real objective should be to maximise the positive difference we are able to make in the life we choose to lead, and the world we live in.
  • Trying to control events or issues where we have ceded or have zero power over the outcome.

The private equity or venture investor doesn’t have to invest. The entrepreneur doesn’t have to accept the investment. When they do accept majority investment, the entrepreneur ceases to have the ultimate decision-making power. Don’t whine or somehow think you retain superpowers, you really don’t, concentrate on making a positive difference within those constraints. If you don’t like the constraints, let it go and move on. The same applies to capricious General Partners feeling that the private equity model is underappreciated in the wider world or when power has shifted from their investee businesses to their customers or competitors.

A case in point, yesterday’s headline sale to Disney of large chunks of the Murdoch empire, is just that recognition that the Murdochs cease to have the power to positively impact their family’s and their assets’ future within the constraints laid down (market competition). Letting go is a common sense response, nothing more.

© James Berkeley 2017. All Rights Reserved.